The Internal Revenue Allotment (IRA) is a local government unit’s (LGU) share of revenues from the Philippine national government. Provinces, independent cities, component cities, municipalities, and barangays each get a separate allotment.
The allotment is largely based upon the type of government they are and a formula based upon their land area and population. Section 284 of the Local Government Code of the Philippines (RA 7160) sets up the formula for the distribution of the allotment.
All or nearly all of the revenue that a local government has to spend comes from their IRA, though some local governments also have additional local sources of revenue such as property taxes and government fees. Typically for municipalities, the IRA accounts for 90% of total revenues. Since cities have more sources of local revenues, their IRA ranges from 50% to 70% of their total budget.
A portion of each local government unit's allotment is set aside their Sangguniang Kabataan (SK) or youth council.
Since the money comes from the national government, it is possible for the distribution of the allotment to be delayed or prevented if they local government unit is a political opponent of those in control of the money.
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